Natural Gas Consumption and Economic Growth: Empirical Evidence from Selected African Countries

This study investigated the impact of natural gas consumption by the industrial sector, residential/households and transport sector on economic growth of selected countries in Africa (Algeria, Egypt, Equatorial Guinea, Ghana, Nigeria and Tunisia) over the period 1990 – 2021. In order to achieve this objective, data on growth rate of gross domestic product (RGDP), total natural gas consumption, industrial gas consumption, residential gas consumption and natural gas consumed by the transport sector of the selected countries were sourced from the World Bank Development Indicators and International Energy Agency (IEA) and analyzed using panel Autoregressive Distributed lagged (ARDL) method. The results of our analysis show that: Total natural gas consumed has negative and significant impact on economic growth in the long run but positive and significant effect on economic growth of the selected countries in the short run. Industrial gas consumption has positive and significant impact on economic growth of the selected countries both in the short and long run. Residential gas consumption has positive and significant impact on economic growth in the long run but negative and insignificant effect on economic growth in the short run. Natural gas consumed by the transport sector has positive but insignificant effect on economic growth of the selected countries over the period under study. The impact of natural gas consumption on economic growth for all the countries under study does not vary. That a long run relationship exists between natural gas consumption and economic growth among the countries been investigated. Based on these findings, the study recommended that governments of African countries under investigation should encourage natural gas consumption in the industrial, transport and households by building gas infrastructure and investment in the oil and gas sector in order to stimulate economic in the sub region.